New rules on foreign debt registrations aim to clarify uncertainties in the Chinese foreign debt regime. The rules, published by the State Administration of Foreign Exchange (SAFE), aim to streamline SAFE's administration concerning foreign currency inflow and outflow.

The changes arise from, among others, SAFE's adoption of a new IT system, which allows it to be interconnected with systems of all banks in China. SAFE's new approach is to register a company's basic information in the centralised IT system, e.g. registered capital and total investment, and to have the other procedures handled by banks directly, e.g. opening a capital account, payment of contribution. As a result, SAFE will be less involved in routine registration of foreign debts, foreign direct investments (FDI) and outbound direct investments (ODI). The procedures handled by banks remain subject to other authorities' approvals, if applicable. More specifically, the main changes are:

  • Companies no longer have to obtain SAFE approval for opening foreign debt accounts, registration for each withdrawal, converting foreign debts into RMB and repayment of the principal and interest. Only foreign debt agreement registration will be handled by SAFE, while the rest will be handled by banks.
  • Certain requirements will be eased. For instance, a foreign invested enterprise (FIE) can now open more than one foreign capital account, also in places other than its place of registration.
  • Previously, SAFE required approximately 20 business days to handle a single registration application. Under the new rules, SAFE should be able to handle an application within 5 business days.

Regulation reference:    Circular on Administrative Measures on Registration of Foreign Debts (Circular No. 19); and Circular on Administrative Provisions on Foreign Exchange in Domestic Direct Investment by Foreign Investors and Relevant Supporting Documents (Circular No. 21)

Issuing authority:          State Administration of Foreign Exchange

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